SANTA MONICA, CALIF. — OTA Broadcasting, the entity co-created by computer magnate Michael Dell—ostensibly to buy TV stations and sell them at auction—is selling two stations in Palm Springs, Calif., to Entravision Communications Corp., the latter announced today.
Entravision said entered into an agreement with OTA Broadcasting to acquire KMIR-TV, the NBC affiliate, and KPSE-LD, the MyNetworkTV affiliate, serving Palm Springs for $21 million.
Entravision is funding the purchase with auction proceeds. Entravision sold four TV stations at auction, according to FCC’s April 4, 2017, winning bid list. WVUN in Hartford, Conn.; KSMS in Monterey, Calif.; WJAL and WMDO-CD in Washington, D.C., were sold for a total of $ 263,592,981. Entravision indicated it had channel-sharing agreements for each of those stations.
It will treat the transaction as a “like-kind exchange” with regard to IRS rules. It estimated the purchase price to be less than 6.5 times expected 2016-17 pro forma cash flow, and expects it to be “immediately free cash-flow accretive.”
Pending customary closing conditions, including Federal Communications Commission consent, the deal is expected to close in the fourth quarter of 2017.
Walter F. Ulloa, chairman and CEO of Entravision, said, “Palm Springs is a growing and vibrant market that we know very well and have served for more than 20 years. Our existing television and radio assets located in the market have helped us build strong relationships with the Palm Springs community and our local news programming, Noticias Ya, is highly rated.
“We are excited to add KMIR’s impactful and significant local news presence to our portfolio in Palm Springs. This is a strategic transaction that is extremely attractive on a financial basis, allowing us to broaden the services we provide the Palm Springs market and positions us to continue to build on the success of KMIR and KPSE.”
Bill Tolpegin, CEO of OTA Broadcasting, said, “We are grateful for the hard work and dedication of KMIR’s terrific employees during our ownership of the station. We are confident that Entravision will be a great new home for the station and its team, and look forward to following their continued success.”
OTA Broadcasting sold 10 stations in the incentive auction, including eight low-power TV licenses. The stations are in Boston, Charlotte, N.C., New York, Pittsburgh, Providence, R.I.; and San Francisco. OTA made $441 million on the sales and indicated each of the sold stations had channel-sharing agreements. OTA also asked the FCC if it could engage in aftermarket sales to wireless providers once the auction was completed. The commission did not respond.
Entravision currently owns and operates the UniMas and Univision affiliated television stations—KVER-CD, KEVC-CD, and KVES-LD—and 94.7 FM Jose and 103.5 FM Tricolor radio stations—KLOB-FM and KPST-FM—serving the Palm Springs market, which is ranked No. 146 in total population and No. 49 in Hispanic population. Entravision said its Univision affiliate, KVER-TV is the leading station in the market, number one in full week ratings, Mon-Sun 3am-3am among Adults 18-34, 18-49 and 25-54, according to Nielsen numbers from May 2017.
